wethDYDX
**wethDYDX is a wrapped version of ethDYDX obtained when a user interacts with the wethDYDX Smart Contract. wethDYDX cannot be bridged to the dYdX Chain via the wethDYDX Smart Contract and any wethDYDX tokens sent to the wethDYDX Smart Contract will be permanently locked and irrecoverable.**Ethereum-based DYDX (ethDYDX) launched on August 3, 2021. The ethDYDX token is a governance token for the dYdX Layer 2 protocol built on Ethereum (“dYdX v3”). Token holders are able to govern certain parameters of dYdX v3 to align incentives between traders, liquidity providers, and partners. The ethDYDX token enables a robust ecosystem around governance, rewards, and staking - each of which is designed to drive future growth and decentralization of dYdX v3.
wethDYDX token is a wrapped version of ethDYDX obtained when a user interacts with the wethDYDX Smart Contract.
The dYdX community through dYdX v3 governance voted to give wethDYDX the same governance and utility functions as ethDYDX in dYdX v3.
## Migration to the dYdX Chain
On June 22, 2022, dYdX Trading Inc.(“dYdX Trading”) announced the next iteration of the dYdX protocol - the dYdX Chain Open Source Software. The dYdX Chain is a proof-of-stake blockchain network and, as such, it requires a Layer 1 (“L1”) protocol token for staking to validators in order to secure the chain and for stakers of the L1 token to govern the network. Holders of the L1 token can use their tokens to run a Vvalidator or stake their tokens to a Validator in order to participate in securing and governing the network.
The wethDYDX Smart Contract enables a potential migration of ethDYDX from Ethereum to the dYdX Chain.
When interacted with, the wethDYDX Smart Contract would carry out the following functions in a fully permissionless and automated manner:
Receive and permanently lock the ethDYDX tokens sent by the user to the wethDYDX Smart Contract;
Send a wrapped version of the Ethereum-based DYDX token (“wethDYDX”) to the user on a 1-1 proportional basis on Ethereum; and
dYdX Chain validators can also read and ingest the information in the wethDYDX Smart Contract such that corresponding DYDX can be distributed to users by validators on the dYdX Chain once there is confirmation that Step 1 above is complete and the ethDYDX is permanently locked in the wethDYDX Smart Contract.
Please note that wethDYDX tokens cannot be bridged to the dYdX Chain and, if sent to the wethDYDX Smart Contract, will be lost.
More information about the migration of ethDYDX from Ethereum to dYdX Chain is available here.